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Global metals deals insights: Q3 2018

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Executive summary

Despite lower deal volume, total deal value increased by 78% this quarter when compared to Q2 2018. The increase in deal value was headlined by a $6.1 billion merger in the gold mining space. Transactions were also impacted by the rise in demand of metals such as cobalt, lithium, and nickel, as government initiatives to promote electric vehicles intensifies globally.

The ongoing US steel and aluminum tariff issues have led foreign businesses to begin targeting inbound M&A in the US in order to set up direct operations. Meanwhile, China’s supply-side reform to manage overcapacity in steel production and the closure of lower-end induction furnaces, are acting as headwinds for deal activity to add upgraded capacity in the region.

Key trends/highlights

Despite lower deal volume, total deal value increased by 11% this quarter when compared to Q2 2018. The increase in deal value was headlined by a $6.1 billion merger in the gold mining space. Transactions were also impacted by the rise in demand of metals such as cobalt, lithium, and nickel, as government initiatives to promote electric vehicles intensifies globally.

The ongoing US steel and aluminum tariff issues have led foreign businesses to begin targeting inbound M&A in the US in order to set up direct operations. Meanwhile, China’s supply-side reform to manage overcapacity in steel production and the closure of lower-end induction furnaces, are acting as headwinds for deal activity to add upgraded capacity in the region.